1. Field of the Invention
The present invention generally relates to a computer based inventory evaluation system and, more particularly, to an inventory value estimation system which interfaces directly with a production planning system to provide an integrated approach to a manufacturing planning software design.
2. Description of the Prior Art
The process of designing, developing and manufacturing a new product, or making major changes to existing products, presents many challanges to product managers and manufacturing managers to bring a product to market for the least cost, within schedule while maintaining product quality. In today's highly competitive industries, product managers and manufacturing managers require information to address many problems that arise because of the complexity of new products and the complexity of world-wide production and the changing nature of competition. The requirement that products be manufactured for the least possible cost is important in all industries. 0f all the costs associated with manufacturing a product, inventory cost is one of the primary factors, and all enterprises try to reduce this cost. Recent advances in manufacturing systems, utilizing proven Japanese techniques of production, try to plan the arrival of all components and materials "just-in-time" to manufacture is a prime example of efforts to reduce inventory cost.
A number of books and articles have been published that address the issue of inventory costs, notably the industry reference Production-Inventory Systems, Planning and Control by Elwood S. Buffa, published by Richard D. Irwin, Inc., Homewood, Ill., and Analysis of Inventory Systems by G. Hadley and T. M. Whitin, published by Prentice-Hall International, Inc., to name two. All systems to date refer to various types of rules for planning purposes in order to reduce inventory costs. When customers place demand for a product from a manufacturer, the planning department analyzes the demand and establishes inventory required to manufacture the product. That inventory, calculated through the bill of material, is the component inventory or raw material inventory. In general, components are assembled together through various stages of the manufacturing process to produce the finished product. All during the manufacturing process, labor and overhead costs are added to the raw material cost to calculate the total cost of the product. Customer demand for a product often changes over time, and customers frequently change the demand quantities and expect response from the manufacturer. In almost all planning systems, the impact of inventory costs (work-in-process inventory) is ignored while responding to changes in customer demand as it is often difficult to establish the work-in-process inventory cost impact due to changes in demand.
Many manufacturing systems are available in the market, such as IBM Corp.'s COPICS (Communications Oriented Porduction Information and Control System), that provide an inventory accounting module which provides the capability to analyze inventory costs of all items in the warehouse or storage locations. As indicated, this product, as well as other competing products, does not provide the capability to analyze work-in-process inventory costs due to changes in periodic demand.
What is needed is a system that addresses the issue of work-in-process inventory costs as a function of changes in customer demand. Such a system should be automated to calculate the costs and, using expert system techniques, provides the manufacturer with information that immediately establishes the impact of demand changes and recommends appropriate action. Expert systems are a branch of computer science, generally referred to as artificial intelligence, which exhibits characteristics normally associated with human behaviour including learning, reasoning, solving problems and so forth. More specifically, an expert system or "knowledge based" system uses certain rules and a database to provide a user interactive environment in the form of a "consultation dialog", just as the user would interact with a human expert.